Cartel claims: The Australian Egg Corporation Ltd has been accused of attempting to manipulate egg prices. Photo: Andrew De La Rue

The Australian Competition and Consumer Commission has accused the industry's most powerful body, the Australian Egg Corporation Ltd, of attempting to create a cartel to manipulate egg prices for both grocery shoppers and businesses.

It is taking court action against the corporation, its managing director James Kellaway, and two directors Jeffrey Ironside and Zelko Lendich, as well as Ironside Management Services, trading as Twelve Oaks Poultry, and Farm Pride Foods.

The ACCC alleges that, in November 2010, the egg corporation told members to kill hens two weeks earlier than usual until mid-2011 to avoid oversupply and a ''catastrophic'' commercial result.

It also alleges that, in early 2012, the corporation organised an oversupply crisis meeting with the top 25 egg producers, saying the industry must stop the ''worrying and disturbing trend threatening current profit levels'', as detailed by Mr Kellaway in an email. Farmers were told production had peaked in September 2011 at 33 million dozen eggs and would continue at record levels unless they lowered output in a ''co-ordinated and consolidated fashion''.

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It was not known whether the attempt was successful. National retail egg sales were valued at $566 million in 2012.

''Detecting, stopping and deterring cartels operating in Australian markets remain an enduring priority for the ACCC, because of the ultimate impact of such anti-competitive conduct on consumers who will pay more than they should,'' its chairman Rod Sims said. ''Industry associations need to be conscious of competition compliance issues when they bring competing firms together.''

Bede Burke, chairman of the NSW Farmers' egg committee, said egg prices were never mentioned at the crisis meeting.

''We've had a terrible oversupply,'' he said. ''And we do this regularly, this is nothing un-normal. Since we were deregulated and production controls and quotas were taken out of Australia in 1989 and beyond, there’s no mechanism to remove oversupply. So we do this as an industry on a highly regulated basis."

‘‘This issue needs to be brought to a head, it needs to be resolved," he said. "The suggestion there was any manipulation or even talk about pricing is just absolute rubbish."

The egg corporation refused to comment on the allegations, but said it would co-operate in court.

It is an industry corporation of about 100 to 150 producer members that collects levies for promotional activities and research and development activities from member egg producers.